<- August 29, 2008 ->

Rumor: China Mobile, Apple Decide on Cooperation Method

It.hexun.com, 8/29/08

A source inside the Ministry of Industry and Information Technology (MIIT) revealed yesterday that China Mobile (NYSE: CHL; 0941.HK) had reached a basic agreement with Apple to cooperate on bringing the iPhone to China without the revenue-sharing agreements Apple has in place with other carriers. Instead, China Mobile will procure the handsets for their full price, and then on-sell subsidized handsets to consumers. The source explained that China Mobile could buy a 3G iPhone from Apple for USD 299 – an example price – and then sell the handset to users for USD 199, treating the additional USD 100 as compensation to Apple.

Keywords: revenue share, 0941.HK, 3G, Apple, CHL, iPhone, MIIT, wireless, mobile phone, pricing, procurement

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